More than half of HR professionals plan to replace their HR software this year. If you're fed up with your outdated software, use this Business.com guide to help you find one that is advanced and ready to handle all of your small business HR needs.

1. 1
SMBs Are Overhauling
Their HR Software

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3. Contents
SMBs Are Overhauling Their HR Software 4
HR applications are among top interests 5
SMBs are trading up 6
Buyers are ready for an HR overhaul 7
In-demand features for HR software 9
Trends in HR software 11

4. 4
SMBs Are Overhauling
Their HR Software
H
uman resources (HR) software solutions, also called Human Resources
Information Systems (HRIS), Human Resources Management Systems
(HRMS), or Human Capital Management (HCM) software, helps
manage a workforce by streamlining the traditional HR functions of benefits
administration, personnel tracking, payroll, and recruiting.
The consumerization of IT and the emergence of cloud services, as well as the
reliance on employee-centric HR software, are changing how employers and
employees interact with HR. Employers are giving employees tools to control
some HR functions themselves. In other words, what used to be the domain of
top management -- talent acquisition, performance and development, benefits
and compensation, and workforce management -- are now more accessible to
(and often managed by) the employees themselves.
This brings significant changes to the way businesses work, including
the increased use of cloud services, mobile devices, and hiring “virtual”
employees who work remotely. It also has brought out a number of HR
software startups that offer small and medium-sized businesses (SMBs) more
employee-driven applications.

5. 5
HR applications are
among top interests
S
urvey results announced in September by Constellation Research
show that SMBs, among other companies, are increasingly interested
in SaaS (software as a service) -- using it most for email, calendaring,
and human resources applications. According to VP and principal analyst
Frank Scavo, 37% of the respondents said email and calendaring were
the top priorities they would be interested investing in, followed by HR
applications at 32%.
According to the report:
Customers appreciate being able to deploy SaaS applications quickly,
without having to invest in IT infrastructure or rely on their internal
IT organizations.At the same time, SaaS providers are addressing
concerns of buyers, such as security and privacy.”

6. 6
SMBs are trading up
A
nother survey shows there’s good reason for SMBs wanting to invest
in HR software. Deloitte’s “Managing Talent Through Technology:
HCM Buying Trends in 2013” report indicated that this year, 61% of
HR professionals plan to replace their human capital management (HCM)
software. More than half say their HR software is outdated, especially if you
take into account the global reach and mobility of today’s workforce.
As a result, HR departments are not just updating to stay current, but rely on the
social and mobile capabilities of HR software solutions to provide a better end-
user experience. Increasingly, they look for software that integrates data from
various sources, and analyzes it to predict performance and identify trends.
Aging functionality, inability to support a global enterprise, disparate
talent management applications, and tired talent acquisition tools are
among the challenges facing many of today’s HCM technology users,”
says Katherine Jones, lead analyst of HCM technology at Bersin &
Associates. She added,“human capital data has to move from numbers
to both correlative and predictive analytics.”

7. 7
Buyers are ready for
an HR overhaul
F
ew new HCM application investments were made during the recent
economic recession, so a lot of HR software is outdated and
cumbersome, difficult to customize, and expensive to support.
Recent software innovations have brought a new look and feel to HR software,
making it easier to use, and often with social and mobile capabilities built in.
The requirement for talent analytics has created a need for improved
embedded metrics and more sophisticated (yet easy-to-use) tools, and
“compelling dashboards.”
The requirement for talent analytics has created a
need for improved embedded metrics and more
sophisticated (yet easy-to-use) tools.

8. 8
Other findings in the Deloitte report included:
ƒƒ 57% of HR professionals surveyed plan to get
new software within the next 18 months
ƒƒ 61% say they will both replace and get new software
ƒƒ 23% are solely replacing existing solutions
ƒƒ 16% plan to add new solutions to their existing HR environments
ƒƒ 1 in 4 organizations plans on replacing a current
HRIS system in the next 12 to 18 months
ƒƒ 20% says they will replace their talent management
applications with an integrated suite
1 in 4 organizations plans on replacing a current
HRIS system in the next 12 to 18 months

9. 9
In-demand features
for HR software
C
ompanies look for differing capabilities in HR software to fill their
needs, but if you think it’s time to update, here are some features you
might need to look at to help you decide:
¾¾ Deeply Integrated Database. The more detailed database you have
the better. That way, you can keep track of job training and continuing
education of your employees, as well as job performance reviews, search
by skills and education, ensure you’re compliant with employment laws
and regulations, and even details like employee birthdays.
¾¾ Application and Recruitment. You’ll want online recruiting software
that will allow you to easily post job openings, track applicants,
search through resumes, schedule interviews, and communicate with
candidates, including using third-party resources and social media.

10. 10
¾¾ Timestamp and Payroll. You should look for software that would
allow you to enter and maintain integrated payroll information such as
schedules, timecards, salaries, benefits, tax withholdings, 401K, and
other benefits and schedule information, no matter how many employees
you have.You should be able to also track vacations and leave (sick,
maternity), and integrate direct deposits.
You should look for software that would allow you
to enter and maintain integrated payroll information
such as schedules, timecards, salaries, benefits, tax
withholdings, 401K, and other benefits.

11. 11
Trends in HR software
¾¾ Social Recruiting. Some startups are helping SMBs tap into social
networks for hiring, like sending direct invites to candidates and
making referrals.
¾¾ Social Learning. Creating a social learning environment and driving an
employee learning agenda by providing personalized training, mentoring,
coaching, and ongoing recognition (as opposed to annual performance
reviews, for instance). Creating a social learning environment that allows
employees to connect and be motivated.
¾¾ Employee-Managed Benefits. Companies are experimenting with point-
and-rewards systems, financial incentives, and team challenges to help
employees make informed healthcare decisions and stay motivated all
year to take care of their own health and overall well-being.

12. 12
¾¾ Mobile Workforce Management. Mobile software for managing payroll,
time and attendance, and compliance, introducing apps that employees
can use on their devices to track hours, for example.
¾¾ Greater Employee Involvement in HR. With so many applications on
the market, it’s not just the senior executives in HR making software-
buying decisions -- employees have a greater say. Employees bring their
own apps and devices to work, so adoption and usage are driven by
what they use, and savvy SMBs recognize that. Apps and cloud services
that require little training to use are more popular.
Source: “The employee-centric evolution of HR software,” GigaOm, 09/27/13
Source: “Survey: Email, calendaring, HR top list of SaaS buyers’ priorities,” PCWorld, 09/13/13
Source: “New Software Helps HR Drive Business Decisions,” T+D/ASTD, 09/08/13
Source: “The Most Important Features for Your HR Management Software,” Gadgetsteria, 09/19/13
Source: “Managing Talent through Technology: HCM Buying Trends in
2013 by Bersin by Deloitte,” Bersin by Deloitte, 5/7/13
Source: “SaaS Adoption Trends and Customer Experience Report Published
by Constellation Research,” Constellation Research, 09/10/13
Source: “Compare Human Resources Software Systems,” Software Advice, 09/27/13
Source: “Oracle Upgrades HR Cloud Software To Battle Rivals,” InformationWeek, 09/24/13